Daily Market Notes | 5-minute read

July 3, 2024

By Donald Selkin | Chief Market Strategist

DOW: 39,331.85

S&P: 5,509.01

Nasdaq: 18,028.76

10YR T-Note: 4.41%

Bitcoin: 59,665.71

VIX: 12.13

Gold: $2358.4 Crude Oil: $83.08

Prices Current as of 9:08 am

Source: CNBC

40+ Years on

Don Selkin, the creator and innovator of the "Fair Value" numbers, as its Chief Market Strategist on the Newbridge platform has given CNBC and its Predecessor, these numbers every day for the over 40 years - never missing a single day, as well as given the fair value for the Nasdaq 100 futures since their introduction in 1996 and the Dow Jones stock index futures since 1997. Mr. Selkin has also been quoted in several publications including but not limited to Bloomberg News, New York Post, Reuters, and The New York Times. Mr. Selkin's Fair Value numbers are included in the U.S.
Futures Report broadcast on CNBC every day before the market
opens attributing "Newbridge Securities" as the source. In addition, NSC provides to its professionals, their clients and the public access to Don Selkin's more in depth financial market views.

Special Comment – the next edition of the Daily Market Notes will appear on Monday, July 8, followed by the Weekly Market Comments on Tuesday, July 9 – Happy Independence Day

In another astounding upside day, the market, as we have seen so many times this year, turned a lower opening into a rip-roaring upside rally that resulted in a new record for the S&P and an additional one for the Nasdaq. And how does this action make those who felt the need to panic-sell near the end of Friday’s session look now?

So after all was said and done, the Dow ended higher by 162 up to 39,331 led by AAPL, JPM at a new high, UNH and V while the S&P broke through to a new high with a gain of 34 to 5509 led by the ones mentioned above plus AVGO, NFLX, META and TSLA. And the gains were dramatic in the final 15 minutes with an advance of 12 points which is why the indices will start out slightly lower today, and after that, who knows?

The Nasdaq just did its thing once again with a 149 point gain to 18,028 led by those aforementioned stocks and the Russell 2000 Index of small stocks got swept along to the upside with a 3 point gain to 2033.

The VIX actually broke down into the high 11’s on this rally before ending at 12.03, which leaves the market vulnerable to a setback of some sort and we will see how the minutes of the last Fed meeting which will be released at 2pm after the market closes early today at 1pm, and then we get the all-important June jobs report on Friday morning when very few people will be around and that could affect things one way or the other depending on how it goes relative to the expectation of 190,000 new jobs created.

TSLA moved higher for the second day in a row and helped drive the upside action. This stock has that tendency to go to sleep for weeks or months as it has done and then catch everyone off guard, so to speak, as there was huge short-covering in this one to a 10% gain after the electric-vehicle maker reported a milder drop in sales for the spring than analysts expected.

Stocks got a lift from easing Treasury yields after Fed Chair Jerome Powell made comments that investors took as a signal for possible cuts to interest rates later this year. He gave a nod to improvements in inflation data after some disappointingly high readings early in the year.

“We just want to understand that the levels that we’re seeing are a true reading of underlying inflation,” he said.

The hope is that inflation will slow enough to convince the Fed to lower its main interest rate, which has been sitting at its highest level in more than two decades and pressing the brakes on the economy. Treasury yields have largely been easing since April on hopes for such cuts.

The May JOLTS report may have hindered those hopes, though as it showed that U.S. employers were advertising more job openings at the end of May than economists expected and slightly more than in April. While plentiful job openings are great news for workers, the fear is that too strong of a job market will put upward pressure on inflation and force delays to rate cuts.

After swinging lower following Powell’s comments, Treasury yields pared their losses following the report on job openings. The yield on the 10-year Treasury was at 4.42%, compared with 4.46% late Monday.

The price of benchmark U.S. oil ended up slipping modestly after touching its highest price since April earlier in the morning.

Crude prices have largely been rising on expectations for strong demand during the summer, as well as the possibility of hurricanes damaging oil production in the Gulf of Mexico as Hurricane Beryl is roaring through the Caribbean.

In stock markets abroad, European indexes fell after a report showed that inflation in the region remains stuck above a level that the European Central Bank is hoping for. A day earlier, French stocks had rallied after election results suggested a far-right political party may not win a decisive majority in the country’s legislative elections. That raised the possibility of gridlock in the French government, which would prevent a worst-case scenario where a far-right with a clear majority could push policies that would greatly increase the French government’s debt. This is a big year for elections worldwide, with voters in the U.K. heading to the polls later this week.

In Asia, Japan’s Nikkei 225 rose 1.1% after the value of the Japanese yen again neared a 38-year low. When the yen is weak, it can boost the fortunes of Japanese exporters.

Earnings reports will see: today – STZ higher.

Economic reports will see: yesterday - May JOLTS report unexpectedly rose to 8.14 million; today – weekly jobless claims rose by 4K to 238K, May trade balance declined to $75.1 billion, May factory orders, 2pm release of the minutes from the last Fed meeting; Friday – June non-farms payroll report for which the prediction is 190K.

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